Barclaycard "Transfer to Bank". Advice needed

nohassles

Hello everyone! Long time reader, first time poster here...

At the end of last year, Barclaycard advertised a promotion where I could transfer some of my available spend from my credit card to my bank account at 0% until August of this year. I have seen enough on this website to know that usually with credit card BALANCE transfers, (i.e. CC to CC) you should never spend because the 0% balance gets paid off first, and the high interest spending gets trapped underneath it.

However, on the terms of this transfer was the following:

"Until you pay your statement balance in full, we charge interest on purchases from the purchase date until we receive your payment. This means if you have a money transfer on your account and you only pay off the purchases you make that month, you will be charged interest on those purchases."

"If you don't pay your statement balance in full each month, we will use the amount you pay to reduce the balances with a higher interest rate before the balance you have transferred as this will have a promotional interest rate"

I interpreted this to mean that if I spent on this card and paid off the purchases, my promotional rate would always be preserved and the only interest paid would be on my purchases

By the end of April, I cleared off all of my purchases, and the only remaining balance was the balance that I transferred to my bank. It stayed that way until I made a small purchase in the final few days of my May statement period. When I got my May statement, I was alarmed to see that I had been charged considerable interest.

I contacted BC to find out why I was still paying interest, and I was told that my promotional period had been paid off in March, but they would to refund the interest and reinstate my promotional balance. In that same message I was told, and I quote...

"However, If a customer completes a balance transfer and continues to spend on their card, then they will not qualify for the grace (interest free) period on those purchases unless they pay the entire statement balance in full each month. Repaying only the purchase amount does not qualify them for the grace period.

Also, payments are applied towards the billed balance. If the account has a billed 0% balance and an unbilled purchases balance on higher interest rate, the payment is applied to the 0% balance first."


I then replied by copying and pasting the same T&Cs that I pasted above here.

The response was:

May I inform you that the promotional offer on your account had not reverted to standard purchase interest rate, it had got paid off.

It may help you to know that the promotional offer ... is at the interest rate of 0% per year until 01/08/2016.

If you pay less than your total outstanding balance, we'll use the amount you do pay towards reducing the higher interest rate balances on your account first, before the lower interest rate balances.

If you have a standard balance at the same time as a promotional balance, and you only repay the standard balance amount, your account will not be eligible for the interest free period on that balance. This means that a small interest will be charged on the next statement.


The information I've received is inconsistent at best and at worst downright misleading. Based on this information, I really don't know...

- am I paying interest on purchases or the whole balance?
- have I lost my promotional balance altogether or is it just 'not eligible' when I spend?

What should I do? Is this a case of mis-selling?

Sorry for the long post but I think all of this information is necessary!

Marcio45

I believe that you wont pay any interest on the money transfer deal until the end of the promotion.

Be carefull when you make a purchase to run alongside a balance/money transfer, that you dont get the interest free period of 50 odd days. This is because you only get interest free period on purchases when you pay the full statement balance (including any deals like balance transfer).

As you only intend to pay for the new purchases you will pay interest from day one because there is still a balance to pay from the balance/money transfer.

You have also to be carefull to pay for the purchases only when it comes out on the statement. You will always pay some interest in this case.
Lets say you make a purchase and make a payment the next day, that payment might not be applied to the purchase because it hasnt come out on the statement yet, but it will be applied probably to the money transfer deal.

I hope this makes any sense. It also took me a while to understand how it works.

nohassles

Marcio45 wrote: »

I believe that you wont pay any interest on the money transfer deal until the end of the promotion.

Be carefull when you make a purchase to run alongside a balance/money transfer, that you dont get the interest free period of 50 odd days. This is because you only get interest free period on purchases when you pay the full statement balance (including any deals like balance transfer).

As you only intend to pay for the new purchases you will pay interest from day one because there is still a balance to pay from the balance/money transfer.

You have also to be carefull to pay for the purchases only when it comes out on the statement. You will always pay some interest in this case.

Hi Marcio, thanks for your reply.

The way you describe it is also the way that I have interpreted it. However, the fact remains that the terms say that when making payments the high interest balance is paid off first, before the 0% interest, and these customer service people are saying something else. :mad:

MaestroB

Hello!

Sorry for jumping in but actually I'm not replying to this post but as a new comer into the forum, I just want to say hello to you old folks.


Thanks

Marcio45

Hi nohassles,

Are you making sure you are waiting for the next statement to show the new purchases and only then making the payment?
If you make payment before the statement is issued then it will be applied to the last statement balances, which might not include yet the new purchases.
Just to make this clear...

nohassles

There may have been times where I made a payment before I received the statement.

Marcio45

That might be part of the problem. If you make a payment before the purchase shows on the monthly statement, it will probably be applied to your money transfer instead. Done that and learned my lesson.

Always wait for your statement. You will have to pay interest on the purchase, but it should be a small amount.

Dobbibill

Hi nohassles, welcome to the forum.

nohassles wrote: »

At the end of last year, Barclaycard advertised a promotion where I could transfer some of my available spend from my credit card to my bank account at 0% until August of this year. I have seen enough on this website to know that usually with credit card BALANCE transfers, (i.e. CC to CC) you should never spend because the 0% balance gets paid off first, and the high interest spending gets trapped underneath it.

I don't know where you have seen this information, this is wrong.

However, on the terms of this transfer was the following:

"Until you pay your statement balance in full, we charge interest on purchases from the purchase date until we receive your payment. This means if you have a money transfer on your account and you only pay off the purchases you make that month, you will be charged interest on those purchases."

"If you don't pay your statement balance in full each month, we will use the amount you pay to reduce the balances with a higher interest rate before the balance you have transferred as this will have a promotional interest rate"

I interpreted this to mean that if I spent on this card and paid off the purchases, my promotional rate would always be preserved and the only interest paid would be on my purchases

You interpret this correctly.

The bit you have missed is payments are allocated to statemented transactions.

You lose the 'grace period' [this only applies if you pay your balance in FULL every month, whilst a BT is sitting on the account, you are not paying in full] when you add transactions to your BT.

You will also incur trailing interest the following month so need to ensure you pay that off too. You have to clear any outstanding purchases and interest for two consecutive months to prevent interest being applied.

[Deleted User]

Sorry to ask probably such an easy question but just confirming it all in my head first.

My credit card debt is about 3K but I have a 0% money transfer offer which I'm thinking of using.

If I do the equivalent 3K money transfer, then use this and pay off my standard balance, does this mean what I think it means?
Provided I make no other purchases on the CC then I can clear it all off at 0% interest?

Marcio45

Yes. It does work. Basically if the bank allows you a money transfer you are allowed to use it to whatever suits you, including paying balances with higher interest. As because any new payments is applied to the money owned with the highest interest it will do what you intend.

[Deleted User]

Thanks for that Marcio. Do I have to wait for my following statement before I use it or can I use it once confirmed in my bank account?
Also is there any issue with me doing this between my Barclaycard and Barclay's debit account and then back to Barclaycard?
If things are this easy, I hope more people are taking advantage of this situation to give themselves 0% interest breaks!